Case Law Details
Sharp Designers and Engineers India Pvt. Ltd. (Formerly Khinvasara Investments Pvt. Ltd.) Vs ACIT (ITAT Pune)
AO had not brought any comparables from market to make out that the case that impugned payment was excessive or unreasonable within the meaning of section 40A(2)(b) and based his conclusion merely on low profitability of recipient firm was not relevant consideration for applying section 40A(2)(b). Therefore, addition was deleted.
FULL TEXT OF THE ITAT JUDGMENT
There are 3 appeals under consideration. ITA No. 2263/PUN/2014 is filed by the assessee against the order of CIT(A)-V, Pune, dated 12-09-2014. ITA No. 2283/PUN/2014 and ITA No.1262/PUN/2015 are filed by the Revenue against the orders of CIT(A)-V, Pune and CIT(A)-6, Pune, dated 12-09-2014 and 15-06-2015 respectively.
2. In all these 3 appeals, the issue of allowability of (1) the deduction u/s.80IA of the Act claimed through filing of the revised return of income, (2) the correctness of the disallowance made by the AO u/s.40A(2)(b) of the Act and (3) the correctness of the disallowance made u/s.14A of the Act r.w. Rule 8D(2) of the IT Rules, are involved. Considering the commonality of the issues, we proceed to adjudicate all the grounds in this composite order.
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